beer game/bullwhip effect

Question 1

Oscillation

Answer 1

inventory goes down(stock out), then up(excess inventory)

Question 2

Amplification

Answer 2

height of oscillations (and hence costs) increases the further away one is from the end customer (upstream)

Question 3

lag

Answer 3

the order swings happen later in time and increase as one goes further away from customer

Question 4

The bullwhip effect

Answer 4

Fluctuations in orders and swings in inventories increase as they move up the supply chain from retailers to wholesalers to manufactures, Demand information is distorted throughout the supply chain, such that different stages have very different estimates of what demand looks like

Question 5

what are the reasons of bullwhip?

Answer 5

(operational)forecasting based on orders ; order batching; price fluctuations; lead time;Rationing and shortage gaming( you order more than you originally needed, because you think that you will get less)

behavior- cognitive limitations(failing to understand what is happening, inability to cordinate

Question 6

remedies to bullwhip effect

Answer 6

aligning goals and incentives- improve coordination within the supply chain by aligning goals and incentives so every participant in supply chain activities works to maximize total supply chain profits
collaboration 0 traditional supply chain 1quick response info changing 2 vendor management inventory 3 Continuous Replenishment
operational efficiency: reducing lead times, just in time managemnt, reduce order batching, reduce price flactuations; Reduce Rationing and shortage gaming